UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended December 31,2007

                                       or

                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

         For the transition period from ____________ to ________________

                       Commission file number: [000-28277]

                            HERITAGE WORLDWIDE, INC.
                        ---------------------------------
        (Exact name of small business issuer as specified in its charter)

                     Delaware                        13-4196258
        -----------------------------------     --------------------
         (State or other jurisdiction of          (I.R.S. Employer
          incorporation or organization)         Identification No.)


             337 Avenue de Bruxelles La Seyne-Sur-Mer (France) 83507
 ------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                              (011) (33) 494-109810
                        ---------------------------------
                (Issuer's telephone number, including area code)


Check whether the issuer has (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The total number of shares of the issuers' common stock, $.001 par value,
outstanding at February 13, 2007 was 17,410,299.

Transitional Small Business Disclosure Format:  Yes [ ] No [X]




<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS


         To the extent that the information presented in this Quarterly Report
on Form 10-QSB for the quarter ended December 31, 2007 discusses financial
projections, information or expectations about our products or markets, or
otherwise makes statements about future events, such statements are
forward-looking. We are making these forward-looking statements in reliance on
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Although we believe that the expectations reflected in these
forward-looking statements are based on reasonable assumptions, there are a
number of risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements. These risks and uncertainties
are described, among other places in our 2007 Annual Report of Form 10-KSB, in
"Management's Discussion and Analysis or Plan of Operation."

         In addition, we disclaim any obligations to update any forward-looking
statements to reflect events or circumstances after the date of this Quarterly
Report. When considering such forward-looking statements, you should keep in
mind the risks referenced above and the other cautionary statements in this
Quarterly Report.

                                       2

<PAGE>

                  HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                              December 31, 2007
                                 (UNAUDITED)

                                    ASSETS
Current Assets:
  Cash                                                          $       85,598
  Accounts receivable, net of an allowance for doubtful
    accounts of $290,174 and allowance for product
    returns of $538,078                                              8,152,206
  Inventories, net of allowance for obsolescence of $613,422         4,851,342
  Prepaid expenses and other current assets                            896,712
                                                                ---------------

     Total current assets                                           13,985,858

Property and equipment, net of accumulated depreciation
 of $4,585,698                                                       1,782,848
Goodwill                                                             1,287,290
Investment in SCI Lucas                                                714,594
Other assets                                                           154,451
                                                                ---------------

     Total assets                                               $   17,925,041
                                                                ===============

                     LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Lines of credit                                               $    2,209,697
  Accounts payable and accrued expenses                              6,193,463
  Current portion of capitalized lease obligations                     218,933
  Current portion of long term debt                                    294,083
  Convertible debentures and related accrued interest payable,
    net of discount of $28,639-related party                         1,012,443
  Reserve for product replacements                                     166,785
                                                                ---------------

     Total current liabilities                                      10,095,404

Convertible debentures, net of discount of $514,708                  2,485,292


Capitalized lease obligations, net of current portion                  279,164
Long term debt, net of current portion                                 968,689
                                                                ---------------

     Total liabilities                                              13,828,549
                                                                ---------------

Minority interest                                                      870,328
                                                                ---------------

Stockholders' Equity:
  Common stock; $.001 par value, 50,000,000 shares authorized,
    18,160,299 issued and 17,410,299 outstanding                        17,411
  Additional paid-in capital                                         6,231,559
  Accumulated other comprehensive income                             3,424,140
  Accumulated deficit                                               (6,446,946)
                                                                ---------------

     Total stockholders' equity                                      3,226,164
                                                                ---------------

     Total liabilities and stockholders' equity                 $   17,925,041
                                                                ===============




          See Notes to Unaudited Consolidated Financial Statements.

                                       3
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                          For the three-month period ended      For the six-month period ended
                                                    December 31,                          December 31,
                                          --------------------------------      ------------------------------
                                              2007              2006                   2007             2006
                                          -------------     --------------      -------------    -------------
<S>                                        <C>                <C>               <C>              <C>
Revenues                                  $  4,434,849      $   4,381,744       $  9,404,148     $  7,769,470

Cost of revenues                             1,741,388          1,422,331          4,141,704        3,509,652
                                          -------------     --------------      -------------    -------------

     Gross profit                            2,693,461          2,959,413          5,262,444        4,259,818
                                          -------------     --------------      -------------    -------------

Operating expenses:
  Selling, general and administrative        2,589,498          3,014,960          4,976,135        3,888,391
  Research and development                     324,311            243,171            670,616          719,903
                                          -------------     --------------      -------------    -------------

     Total operating expenses                2,913,809          3,258,131          5,646,751        4,608,294
                                          -------------     --------------      -------------    -------------


Operating loss                                (220,348)          (298,718)          (384,307)        (348,476)
                                          -------------     --------------      -------------    -------------

Other expenses:
  Gain (Loss) in equity investment              (2,213)            (6,467)             9,464            8,145
  Interest expense-related party               (34,606)           (30,205)           (49,858)         (86,268)
  Interest expense                            (115,371)          (237,165)          (261,153)        (333,963)
                                          -------------     --------------      -------------    -------------

     Total other expenses                     (152,190)          (273,837)          (301,547)        (412,086)
                                          -------------     --------------      -------------    -------------

Loss before provision for
  income taxes                                (372,538)          (572,555)          (685,854)        (760,562)

  Provision for income taxes                         -             15,638                  -                -
                                          -------------     --------------      -------------    -------------

Loss before minority interest                 (372,538)          (556,917)          (685,854)        (760,562)

Minority interest                                4,139             27,832               (849)          13,362
                                          -------------     --------------      -------------    -------------

Net loss                                      (368,399)          (529,085)          (686,703)        (747,200)

Other comprehensive income, net of taxes

Foreign currency translation adjustment        363,285            299,765            925,847          391,891
                                          -------------     --------------      -------------    -------------

     Comprehensive income (loss)          $     (5,114)     $    (229,320)      $    239,144     $   (355,309)
                                          =============     ==============      =============    =============

Basic net loss per common share           $      (0.02)     $       (0.03)      $      (0.04)    $      (0.04)
                                          =============     ==============      =============    =============

Basic weighted average common
shares outstanding                          17,410,299         17,410,299         17,410,299       17,410,299
                                          =============     ==============      =============    =============

Diluted net loss per share                $      (0.02)     $       (0.03)      $      (0.04)    $      (0.04)
                                          =============     ==============      =============    =============

Diluted weighted average common shares
 outstanding                                17,410,299         17,410,299         17,410,299       17,410,299
                                          =============     ==============      =============    =============
</TABLE>



      See Notes to Unaudited Consolidated Financial Statements.


                                       4
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                      For the six-month period
                                                         ended December 31,
                                                    ------------------------------
                                                        2007            2006
                                                    --------------  --------------

Cash flows from operating activities:
<S>                                                 <C>             <C>
Net loss                                            $    (686,703)  $    (747,200)
Adjustments to reconcile net loss to net cash
provided by (used in)operating activities:
   Interest expense related to debenture discount         225,063         254,630
   Depreciation and amortization                          624,286         298,767
   Fair value of options                                   46,324         158,666
   Provision for doubtful accounts                        (23,046)         (7,682)
   Provision for returns                                 (130,035)        (90,820)
   Provision for obsolescence- inventory                    9,050               -
   Gain on equity investment                               (9,464)         (8,145)
   Minority interest                                          849         (13,362)
Change in operating assets and liabilities:
   Accounts receivable                                    461,763         261,487
   Inventories                                            (35,769)       (106,897)
   Prepaid expenses and other current assets              (53,962)        (28,810)
   Other assets                                           (58,542)        165,056
   Provision for product replacements                      (7,381)         28,231
   Accrued interest on convertible debentures               5,041               -
   Accounts payable and accrued expenses                 (126,879)       (820,799)
                                                    --------------  --------------

Net cash (used in) provided by operating activities       240,595        (656,878)
                                                    --------------  --------------

Cash flows from investing activity:

   Purchases of property and equipment                   (292,494)       (175,477)
                                                    --------------  --------------

Net cash used in investing activities                    (292,494)       (175,477)
                                                    --------------  --------------

Cash flows from financing activities:
   (Decrease) increase in lines of credit                (258,730)        606,363
   Proceeds from long term debt                           542,120          35,471
   Repayment of long term debt                           (160,862)       (267,395)
   Repayment of capitalized lease obligations            (151,253)        (84,890)
                                                    --------------  --------------

Net cash provided by (used in) financing activities       (28,725)        289,549
                                                    --------------  --------------

Effect of exchange rate changes on cash                   (33,836)        (23,633)
                                                    --------------  --------------

Decrease in cash                                         (114,460)       (566,439)

Cash, beginning of fiscal year                            200,058         695,509
                                                    --------------  --------------

Cash, end of period                                 $      85,598   $     129,070
                                                    ==============  ==============

Supplemental disclosures of cash flow information:
     Cash paid during the period for interest       $      74,292   $     159,024
                                                    ==============  ==============

     Cash paid during the period for taxes          $           -   $           -
                                                    ==============  ==============

</TABLE>

            See Notes to Unaudited Consolidated Financial Statements.

                                       5
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 1 - NATURE OF BUSINESS AND ACQUISITION

Heritage Worldwide, Inc. (the "Company") was incorporated in the State of
Delaware in 2001. The Company and its subsidiaries develop, manufacture, and
market breast and other body implants and body support products worldwide. The
Company maintains its production facility and headquarters in the Toulon
metropolitan area in Southern France. It also has a distribution facility in
Spain.

NOTE 2 - BASIS OF PRESENTATION AND CONSOLIDATION

The accompanying consolidated financial statements present the results of
operations of the Company's French ("PIP France"), Spanish ("PIP Spain"), and
United States subsidiaries for the six-month period ended December 31, 2007 and
2006. All material inter-company accounts and transactions between the Company
and its subsidiaries have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements include the results
of operations of SCI Lucas, a real estate holding company, in which the Company
holds an interest of 38.05%. SCI Lucas owns the production facility and
headquarters in which the Company operates in Southern France. The results of
operations of SCI Lucas are accounted for using the equity method of accounting.
All material inter-company accounts and transactions between the Company and SCI
Lucas have been eliminated.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going Concern

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company provided cash of
$240,595 for their operating activities during the six-month period ended
December 31, 2007. These conditions raise substantial doubt about its ability to
continue as a going concern.

As a result, our current operations are not an adequate source of cash to fund
future operations. Our ability to continue as a going concern is dependent upon
our ability to obtain the necessary financing to meet our obligations and repay
our liabilities when they become due and to generate profitable operations in
the future. We plan to continue to increase our revenues and provide for our
capital requirements through our lines of credit, however, we have no firm
commitments from any third party to provide such revenues or financing and we
cannot assure you we will be successful in obtaining such commitments as needed.
There are no assurances that we will have sufficient funds to execute our
business plan, pay our obligations as they become due or generate positive
operating results.






                                       6
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Use of estimates

In preparing financial statements in conformity with accounting principles
generally accepted in the United States, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results will differ from those estimates. Significant estimates
during the periods include the allowance for doubtful accounts, allowance for
product returns, evaluation of obsolete inventory, the useful life of long-term
assets, such as property, plant and equipment and goodwill, and the accrual of
product replacement reserve.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of
three months or less to be cash equivalents.

Accounts receivable

Accounts receivable are reported at net realizable value. The Company has
established an allowance for doubtful accounts based upon factors pertaining to
the credit risk of specific customers, historical trends, and other information.
Delinquent accounts are written-off when it is determined that the amounts are
uncollectible. At December 31, 2007, the allowance for doubtful accounts was
approximately $290,000. Additionally, the Company has established an allowance
for product returns based upon factors pertaining to historical trends,
including, among other things, recent and historical return rates for both
specific products and distributors, the impact of any new product releases in a
new jurisdiction and projected economic conditions. At December 31, 2007, the
allowance for product returns was approximately $538,000.

Revenue recognition

The Company recognizes product revenue, net of estimated sales discounts and
provisions for returns, in accordance with Staff Accounting Bulletin No. 104,
"Revenue Recognition in Financial Statements" and SFAS No. 48 "Revenue
Recognition When Right of Return Exists." These statements established that
revenue can be recognized when persuasive evidence of an arrangement exists, the
product has been shipped, all significant contractual obligations have been
satisfied, the fee is fixed or determinable and collection is reasonably
assured.

Prior to July 1, 2006, the Company enters in bill and hold arrangements. No bill
and hold arrangements were outstanding at December 31, 2007. Bill and hold
arrangements would have to meet the following criteria for revenue recognition:

     o    The risks of ownership passed to the buyer;
     o    The customer made a fixed commitment to purchase the breast implants,
          in writing;


                                       7
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     o    The buyer, not the Company, requested that the transaction be on a
          bill and hold basis. The buyer had a substantial business purpose for
          ordering the goods on a bill and hold basis-primarily its on lack of
          warehousing space;
     o    There is a fixed schedule for delivery of the goods. The dates for
          delivery are reasonable and are consistent with the buyer's business
          purpose;
     o    The Company did not retain any specific performance obligations such
          that the earning process is not complete;
     o    The ordered breast implants were segregated from the Company's
          inventory and were not subject to being used to fill other orders;
     o    The breast implants were complete and ready for shipment.
     o    The date by which the Company expect payment was not modified and the
          Company has not modified its normal billing and credit terms for this
          buyer;
     o    The Company's past experiences with and pattern of bill and hold
          transactions;
     o    The buyer has the expected risk of loss in the event of a decline in
          the market value of the breast implants;
     o    The Company's custodial risks are insurable and insured; and
     o    The business reasons for the bill and hold have not introduced a
          contingency to the buyer's commitment.

Stock options

Prior to January 1, 2006, the Company accounted for its stock-based compensation
plans under the recognition and measurement provisions of Accounting Principles
Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and
related Interpretations, as permitted by SFAS No. 123, Accounting for
Stock-Based Compensation. The Company did not recognize compensation cost
related to stock options granted to its employees and non-employee directors
that had an exercise price equal to or above the market value of the underlying
common stock on the date of grant in its condensed consolidated statement of
income prior to January 1, 2006. Effective January 1, 2006, the Company adopted
the fair value recognition provisions of SFAS No. 123R, Share-Based Payment, and
related interpretations using the modified-prospective transition method. Under
that method, compensation cost recognized in the first quarter of 2006 includes
(a) compensation cost for all stock-based awards granted prior to, but not yet
vested as of January 1, 2006 based on the grant date fair value estimated in
accordance with the original provisions of SFAS No. 123 and (b) compensation
cost for all stock-based awards granted on or subsequent to January 1, 2006,
based on the grant-date fair value estimated in accordance with the provisions
of SFAS No. 123R. Results for prior periods have not been restated. Prior to the
adoption of SFAS No. 123R, the Company never recognized tax benefits from
deductions resulting from the exercise of stock options because no options have
ever been recognized.





                                       8
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign currency translation

For foreign operations with the local currency as the functional currency,
assets and liabilities are translated from the local currencies into U.S.
dollars at the exchange rate prevailing at the balance sheet date. Revenues,
expenses and cash flows are translated at the average exchange rate for the
period to approximate translation at the exchange rate prevailing at the dates
those elements are recognized in the financial statements. Translation
adjustments resulting from the process of translating the local currency
financial statements into U.S. dollars are included in determining comprehensive
loss. As of December 31, 2007, the exchange rate for the Euros (EUR) was $1.47
U.S. for 1.00 EUR.

The functional currency of the Company's French and Spanish subsidiaries is the
local currency. The financial statements of the subsidiary are translated to
U.S. dollars using period-end rates of exchange for assets and liabilities, and
the average rate of exchange for the period for revenues, costs, and expenses.
Net gains and losses resulting from foreign exchange transactions are included
in the consolidated statements of operations.

Inventories

Inventories are stated at the lower of cost or market, cost determined by the
first-in, first-out (FIFO) method. The Company writes down its inventory for
estimated obsolescence or unmarketable inventory equal to the difference between
the cost of inventory and the estimated market value based upon assumptions
about future demand and market conditions. The Company writes down inventory
during the period in which such products are no longer marketable in any of
their markets due to governmental regulations as well as inventory which matures
within the next three months of the measurement date.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation is recorded on the straight-line basis over the
estimated useful lives of the assets, which range from three to ten years.
Amortization of leasehold improvements and capital leases is recorded over the
shorter of the straight-line basis over the estimated useful life or the lease
term of the asset. Normal maintenance and repairs of property and equipment are
expensed as incurred while renewals, betterments and major repairs that
materially extend the useful life of property and equipment are capitalized.
Upon retirement or disposition of property and equipment, the asset and related
accumulated depreciation or amortization is removed from the accounts and any
resulting gain or loss is charged to operations.






                                       9
<PAGE>


                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Goodwill

Goodwill represents the excess of costs over fair value of assets of businesses
acquired. In June 2001, the Financial Accounting Standards Board ("FASB")
approved the issuance of Statement of Financial Accounting Standards ("SFAS")
No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible Assets." These standards require that all business combinations
initiated after December 31, 2001 be accounted for using the purchase method. In
addition, all intangible assets acquired that are obtained through contractual
or legal right, or are capable of being separately sold, transferred, licensed,
rented or exchanged shall be recognized as an asset apart from goodwill.
Goodwill and intangibles with indefinite lives will no longer be subject to
amortization, but will be subject to at least an annual assessment for
impairment by applying a fair value based test.

The Company's goodwill at June 30, 2007 results from its 2002 acquisition of its
Spainish subsidiary. Management has established that based on future cash flows
generated from its Spanish operations, the Company's goodwill at December 31,
2007 is not impaired.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever circumstances and
situations change such that there is an indication that the carrying amounts may
not be recovered. In such circumstances, the Company will estimate the future
cash flows expected to result from the use of the asset and its eventual
disposition. Future cash flows are the future cash inflows expected to be
generated by an asset less the future outflows expected to be necessary to
obtain those inflows. If the sum of the expected future cash flows (undiscounted
and without interest charges) is less than the carrying amount of the asset, the
Company will recognize an impairment loss to adjust to the fair value of the
asset. At December 31, 2007, the Company believes that there has been no
impairment of its long-lived assets.

Investment

The Company's investment is reported on the equity method of accounting. Under
this method the initial investment is recorded at cost. Subsequently, the
investment is increased or decreased to reflect the Company's share of income,
losses and dividends paid.

Income Taxes

The Company uses the liability method for income taxes as required by SFAS No.
109 "Accounting for Income Taxes." Under this method, deferred tax assets and
liabilities are determined based on differences between financial reporting and
tax basis of assets and liabilities. Deferred tax assets and liabilities are
measured using enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Valuation allowances are established when
it is more likely than not that the deferred tax assets will not be realized.


                                       10
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Shipping and Handling Costs

Shipping and handling costs are included in cost of revenues in accordance with
guidance established by the Emerging Issues Task Force, issue No. 00-10,
"Accounting for Shipping and Handling Costs." Research and Development Research
and development costs are charged to operations as incurred and consists
primarily of salaries and related benefits, raw materials and supplies.

Income (Loss) per Share

The Company presents basic income (loss) per share and, if appropriate, diluted
earnings per share in accordance with the provisions of SFAS No. 128 "Earnings
per Share" ("SFAS 128").

Under SFAS 128, basic net income (loss) per share is computed by dividing the
net income (loss) for the year by the weighted average number of common shares
outstanding during the year. Diluted net income per share is computed by
dividing the net income for the year by the weighted average number of common
shares and common share equivalents outstanding during the year. The Company has
1,215,000 options outstanding at December 31, 2007. Additionally, the Company
may have to issue up to 2,220,512 shares upon conversion of certain convertible
debentures. All common stock equivalents outstanding during the six-month period
ended December 31, 2007 are antidilutive.

                                                     2007               2006
                                                  ---------          ----------
Numerator:
Net income (loss)                                 $ 239,144          ($355,309)
                                                  =========          ==========
Denominator:
Denominator for basic earnings per share-
Weighted average shares outstanding              17,410,299         17,410,299
Effect of dilutive employee stock options                 -                  -
Denominator for diluted earnings per share-
Weighted average shares outstanding              17,410,299         17,410,299

Basic earnings per share                              $0.04              $0.04
                                                      =====              =====
Diluted earnings per share                            $0.04              $0.04
                                                      =====              =====


                                       11
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments

The carrying amounts of financial instruments, including cash, accounts
receivable, lines of credit and accounts payable and accrued expenses
approximate fair value at December 31, 2007 because of the relatively short
maturity of the instruments. The carrying value of capitalized lease
obligations, long-term debt, and convertible debentures approximate fair value
at December 31, 2007 based upon terms available for companies under similar
arrangements.

New Accounting Pronouncements

In December 2007, the FASB issued FASB Statement No. 160 - Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB No. 51.
This Statement applies to all entities that prepare consolidated financial
statements, except not-for-profit organizations, but will affect only those
entities that have an outstanding noncontrolling interest in one or more
subsidiaries or that deconsolidate a subsidiary. Not-for-profit organizations
should continue to apply the guidance in Accounting Research Bulletin No. 51,
Consolidated Financial Statements, before the amendments made by this Statement,
and any other applicable standards, until the Board issues interpretative
guidance.

This Statement amends ARB 51 to establish accounting and reporting standards for
the noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this Statement was issued,
limited guidance existed for reporting noncontrolling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This Statement improves
comparability by eliminating that diversity.

A noncontrolling interest, sometimes called a minority interest, is the portion
of equity in a subsidiary not attributable, directly or indirectly, to a parent.
The objective of this Statement is to improve the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require: (a) The ownership interests in subsidiaries held by
parties other than the parent be clearly identified, labeled, and presented in
the consolidated statement of financial position within equity, but separate
from the parent's equity, (b) The amount of consolidated net income attributable
to the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, (c) Changes in a
parent's ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently. A parent's ownership
interest in a subsidiary changes if the parent purchases additional ownership
interests in its subsidiary or if the parent sells some of its ownership
interests in its subsidiary. It also changes if the subsidiary reacquires some
of its ownership interests or the subsidiary issues additional ownership
interests. All of those transactions are economically similar, and this
Statement requires that they be accounted for similarly, as equity transactions,


                                       12
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) When a subsidiary is deconsolidated, any retained noncontrolling equity
investment in the former subsidiary be initially measured at fair value. The
gain or loss on the deconsolidation of the subsidiary is measured using the fair
value of any noncontrolling equity investment rather than the carrying amount of
that retained investment, (e) Entities provide sufficient disclosures that
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners.

This Statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009,
for entities with calendar year-ends). Earlier adoption is prohibited. This
Statement shall be applied prospectively as of the beginning of the fiscal year
in which this Statement is initially applied, except for the presentation and
disclosure requirements. The presentation and disclosure requirements shall be
applied retrospectively for all periods presented. Management believes this
Statement will have no impact on the financial statements of the Company once
adopted.

In December 2007, the FASB issued FASB Statement No. 141 (revised 2007),
Business Combinations. This Statement replaces FASB Statement No. 141, Business
Combinations. This Statement retains the fundamental requirements in Statement
141 that the acquisition method of accounting (which Statement 141 called the
purchase method) be used for all business combinations and for an acquirer to be
identified for each business combination. This Statement defines the acquirer as
the entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. This Statement's scope is broader than that of Statement 141,
which applied only to business combinations in which control was obtained by
transferring consideration. By applying the same method of accounting--the
acquisition method--to all transactions and other events in which one entity
obtains control over one or more other businesses, this Statement improves the
comparability of the information about business combinations provided in
financial reports.

This Statement requires an acquirer to recognize the assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited
exceptions specified in the Statement. That replaces Statement 141's
cost-allocation process, which required the cost of an acquisition to be
allocated to the individual assets acquired and liabilities assumed based on
their estimated fair values.

This Statement applies to all transactions or other events in which an entity
(the acquirer) obtains control of one or more businesses (the acquirer),
including those sometimes referred to as "true mergers" or "mergers of equals"
and combinations achieved without the transfer of consideration, for example, by
contract alone or through the lapse of minority veto rights. This Statement
applies to all business entities, including mutual entities that previously used
the pooling-of-interests method of accounting for some business combinations. It
does not apply to: (a) The formation of a joint venture, (b) The acquisition of
an asset or a group of assets that does not constitute a business, (c) A
combination between entities or businesses under common control, (d) A
combination between not-for-profit organizations or the acquisition of a
for-profit business by a not-for-profit organization.

                                       13
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

This Statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. An entity may not apply it
before that date. Management believes this Statement will have no impact on the
financial statements of the Company once adopted.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering
the Effects of Prior Year Misstatements when quantifying Misstatements in
Current Year Financial Statements ("SAB 108"). SAB 108 requires companies to
evaluate the materiality of identified unadjusted errors on each financial
statement and related financial statement disclosure using both the rollover
approach and the iron curtain approach, as those terms are defined in SAB 108.
The rollover approach quantifies misstatements based on the amount of the error
in the current year financial statement, whereas the iron curtain approach
quantifies misstatements based on the effects of correcting the misstatement
existing in the balance sheet at the end of the current year, irrespective of
the misstatement's year(s) of origin. Financial statements would require
adjustment when either approach results in quantifying a misstatement that is
material. Correcting prior year financial statements for immaterial errors would
not require previously filed reports to be amended. If a Company determines that
an adjustment to prior year financial statements is required upon adoption of
SAB 108 and does not elect to restate its previous financial statements, then it
must recognize the cumulative effect of applying SAB 108 in fiscal 2006
beginning balances of the affected assets and liabilities with a corresponding
adjustment to the fiscal 2006 opening balance in retained earnings. SAB 108 is
effective for interim periods of the first fiscal year ending after November 15,
2006. The adoption of SAB 108 did not have an impact on the Company's
consolidated financial statements.

In September 2006, the FASB issued FASB Statement No. 157. This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is a
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practices. This Statement is effective for
financial statements for fiscal years beginning after November 15, 2007. Earlier
application is permitted provided that the reporting entity has not yet issued
financial statements for that fiscal year. Management believes that, for the
foreseeable future, this Statement will have no impact on the financial
statements of the Company once adopted.



                                       14
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued).

On July 13, 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, ("FIN 48"), entitled, "Accounting for Uncertainty in
Income Taxes - an Interpretation of FASB Statement No. 109". Concurrently, FASB
issued a FASB staff position (FSP) relating to income taxes, (FSP) No. FAS 13-2,
"Accounting for a Change or Projected Change in the Timing of Cash Flows
Relating to Income Taxes Generated by a Leveraged Lease Transaction." FASB's
summary of FIN 48 notes that differences between tax positions recognized in the
financial statements and tax positions taken in the tax return (referred to
commonly as "book" vs. "tax") will generally result in: (a) an increase in a
liability for income taxes payable or a reduction of an income tax refund
receivable, (b) a reduction in a deferred tax asset or an increase in a deferred
tax liability, or (c) both of the above. FIN 48 requires the affirmative
evaluation that it is more likely than not, based on the technical merits of a
tax position, that an enterprise is entitled to economic benefits resulting from
positions taken in income tax returns. Further, if a tax position does not meet
the more-likely-than-not recognition threshold, the benefit of that position is
not recognized in the financial statements. Additionally, FIN 48 establishes
guidance for "derecognition" of previously recognized deferred tax items, and
sets forth disclosure requirements. The effective date of FIN 48 is for fiscal
years beginning after December 15, 2006. The Company does not believe that, for
the foreseeable future, FIN 48, once adopted, will have a significant impact on
its financial position, operating results, or cash flows.

In February 2007, the FASB issued FASB Statement No. 159 "The Fair Value Option
for Financial Assets and Financial Liabilities--Including an amendment of FASB
Statement No. 115". This Statement permits entities to choose to measure many
financial instruments and certain other items at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This Statement is expected to expand the use of fair value
measurement, which is consistent with the FASB's long-term measurement
objectives for accounting for financial instruments. This Statement applies to
all entities, including not-for-profit organizations. Most of the provisions of
this Statement apply only to entities that elect the fair value option.

However, the amendment to FASB Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," applies to all entities with
available-for-sale and trading securities. Some requirements apply differently
to entities that do not report net income. The following are eligible items for
the measurement option established by this Statement:

     1. Recognized financial assets and financial liabilities except:

          a)   An investment in a subsidiary that the entity is required to
               consolidate;
          b)   An interest in a variable interest entity that the entity is
               required to consolidate;

          c)   Employers' and plans' obligations (or assets representing net
               overfunded positions) for pension benefits, other postretirement
               benefits (including health care and life insurance benefits),
               postemployment benefits, employee stock option and stock purchase
               plans, and other forms of deferred compensation arrangements, as
               defined in FASB Statements No. 35, "Accounting and Reporting by
               Defined Benefit Pension Plans", No. 87, "Employers' Accounting
               for Pensions", No. 106, "Employers' Accounting for Postretirement
               Benefits Other Than Pensions", No. 112, "Employers' Accounting
               for Postemployment Benefits", No. 123 (revised December 2004),
               "Share-Based Payment", No. 43, "Accounting for Compensated
               Absences", No. 146, "Accounting for Costs Associated with Exit or
               Disposal Activities", and No. 158, "Employers' Accounting for
               Defined Benefit Pension and Other Postretirement Plans", and APB
               Opinion No. 12, "Omnibus Opinion--1967";


                                       15
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)


          d)   Financial assets and financial liabilities recognized under
               leases as defined in FASB Statement No. 13, "Accounting for
               Leases" (This exception does not apply to a guarantee of a
               third-party lease obligation or a contingent obligation arising
               from a cancelled lease.);
          e)   Deposit liabilities, withdrawable on demand, of banks, savings
               and loan associations, credit unions, and other similar
               depository institutions;
          f)   Financial instruments that are, in whole or in part, classified
               by the issuer as a component of shareholder's equity (including
               "temporary equity"). An example is a convertible debt security
               with a noncontingent beneficial conversion feature.

     2.   Firm commitments that would otherwise not be recognized at inception
          and that involve only financial instruments;
     3.   Nonfinancial insurance contracts and warranties that the insurer can
          settle by paying a third party to provide those goods or services; and
     4.   Host financial instruments resulting from separation of an embedded
          nonfinancial derivative instrument from a nonfinancial hybrid
          instrument.

The fair value option established by this Statement permits all entities to
choose to measure eligible items at fair value at specified election dates. A
business entity shall report unrealized gains and losses on items for which the
fair value option has been elected in earnings (or another performance indicator
if the business entity does not report earnings) at each subsequent reporting
date. A not-for-profit organization shall report unrealized gains and losses in
its statement of activities or similar statement.

The fair value option:

          o    May be applied instrument by instrument, with a few exceptions,
               such as investments otherwise accounted for by the equity method
          o    Is irrevocable (unless a new election date occurs)
          o    Is applied only to entire instruments and not to portions of
               instruments.

This Statement is effective as of the beginning of an entity's first fiscal year
that begins after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007, provided
the entity also elects to apply the provisions of FASB Statement No. 157, "Fair
Value Measurements". No entity is permitted to apply this Statement
retrospectively to fiscal years preceding the effective date unless the entity
chooses early adoption. The choice to adopt early should be made after issuance
of this Statement but within 120 days of the beginning of the fiscal year of
adoption, provided the entity has not yet issued financial statements, including
required notes to those financial statements, for any interim period of the
fiscal year of adoption. This Statement permits application to eligible items
existing at the effective date (or early adoption date).



                                       16
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the consolidated financial
statements upon adoption.

Allowance for Product Returns

In the normal course of business, the Company does not provide stock-balancing
or price protection rights to its distributors; however, on a non-recurring
basis, it has historically accepted product returns. The Company estimates its
allowance for product returns to amount to approximately $538,000 at December
31, 2007. Management establishes provisions for estimated returns concurrently
with the recognition of revenue. The provisions are established based upon
consideration of a variety of factors, including, among other things, recent and
historical return rates for both specific distributors and projected economic
conditions.

Allowance for Product Replacements

The Company provides a product replacement program on its products. The Company
provides an accrual for the estimated cost of product replacement and product
liability claims at the time revenue is recognized. Such accruals are based on
estimates, which are based on relevant factors such as historical experience,
the warranty period, estimated replacement costs, identified product quality
issues and are discounted to a current value. Management estimated the amount of
potential future product replacement claims based on statistical analysis.
Changes to actual claims and interest rates could have a material impact on the
statistical calculation which could materially impact the Company's reported
expenses and results of operations.

Concentration of Credit Risks

The Company is subject to concentrations of credit risk primarily from cash and
cash equivalents and accounts receivable. The Company maintains accounts with
French financial institutions, which at times exceeds the insured French
statutory limit of approximately $150,000. The Company minimizes its credit
risks associated with cash by periodically evaluating the credit quality of its
primary financial institutions. The Company's accounts receivables are due from
surgeons in France and from distributors in all other countries in which it
markets its products. The Company does not require collateral to secure its
accounts receivables. However, the Company regularly insures a proportion of its
accounts receivable through a financial institution.

At December 31, 2007, the financial institution insured approximately $3.6
million of the Company's accounts receivables. None the Company's customers
accounted for more than 10% of its net accounts receivables.


                                       17
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Product Concentration Risk

Substantially all of the Company's revenues derive from the sale of breast
implants.

Supplier Concentration Risk

One of the Company's suppliers procures titanium which is used as coating in
certain of the Company's breast implants. The agreement with this supplier
terminates in 2009. The Company cannot guarantee that it will be able to renew
such agreement on acceptable terms, or if unable to renew the agreement, that it
will secure the procurement of such titanium from other suppliers on similar
terms, if at all.

Customers Concentration Risk

None of the Company's customers accounted for more than 10% of its revenues
during the six-month period ended December 31, 2007. Two of the Company's
customers accounted for 15% and 10%, respectively, of its revenues during the
six-month period ended December 31, 2006.

NOTE 4 - INVENTORIES

Inventories at December 31, 2007 consist of the following:

Finished goods                                        $ 3,698,506
Work-in-process                                         1,381,419
Raw materials                                             384,839
                                                      ------------
                                                        5,464,764
Provision for obsolescence                               (613,422)
                                                      ------------
                                                      $ 4,851,342
                                                      ============
NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment and related accumulated depreciation at December 31, 2007
consist of the following:


Tenant improvements                                   $   133,687
Machinery and equipment                                 5,524,239
Office equipment                                          273,145
Transportation equipment                                  187,185
Software                                                  250,290
                                                      ------------
                                                        6,368,546
Accumulated depreciation                               (4,585,698)
                                                      ------------
Property and equipment, net                           $ 1,782,848
                                                      ============


                                       18
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 5 - PROPERTY AND EQUIPMENT (continued)

Depreciation expense amounted to approximately $624,000 and $299,000 during the
six-month period ended December 31, 2007 and 2006, respectively.

NOTE 6 - INVESTMENTS
At December 31, 2007, the Company has a 38.05% investment in SCI Lucas, a
related French real estate company. The equity in income of the investee
amounted to approximately $9,000 and $8000 during the six-month period ended
December 31, 2007 and 2006, respectively. SCI Lucas leases its facilities to the
Company, which is the sole tenant. The leases expire in November 2009. The
leases are renewable automatically unless the Company cancels the leases nine
months prior to the renewal date. The Company incurred rental expense and paid
rent to SCI Lucas in amounts aggregating approximately $240,000 and $212,000
during the six-month period ended December 31, 2007 and 2006, respectively.

NOTE 7 - LONG TERM DEBT

The Company's long term debt consists of various notes payable with outstanding
principal amounts ranging from approximately $7,000 to $494,000, with variable
interest rates, based on the EURIBOR plus 1.6% to 2.5%, ranging from 6.4% to
7.3% per year at December 31, 2007, with due dates between April 2010 and
December 2012. In addition, the Company has received non-interest bearing
advances from ANVAR, an agency of the French government, which finances or
subsidizes certain research and development projects. If the research does not
result in a commercially feasible product and certain other conditions are met,
the Company will not have to repay some or all of the advances. The Company is
currently unable to determine whether the research associated with the advance
will result in a commercially feasible product and does not anticipate knowing
the outcome of such research efforts in the foreseeable future. Accordingly, the
Company includes the advances in the long-term portion of its debt.

NOTE 8 - CONVERTIBLE DEBENTURES

On October 9, 2003, OSMXM "OS", Inc., one of the Company's subsidiaries, entered
into a convertible debentures purchase agreement (the "Agreement") with HEM
Mutual Assurance, LLC ("HEM") to sell $1,000,000 of 1% convertible debentures
due on October 9, 2008. Interest accrues from the date of the transaction and is
payable in cash or common stock, at the option of the debenture holder. In the
event of default, as defined in the Agreement, interest shall accrue at 15% per
annum. The conversion price for one convertible debenture amounting to $498,750
shall be the lesser of (a) $1.25 or (b) 100% of the average three lowest closing
bid prices during the last forty trading days immediately preceding the
conversion. The conversion price for one convertible debenture amounting to
$500,000 shall be the lesser of (a) $1.56 or (b) 100% of the average three
lowest closing bid prices during the last forty trading days immediately
preceding the conversion. The conversion price for one convertible debenture
amounting to $1,250 is $0.001. As part of the Agreement, OS is required to

                                       19
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 8 - CONVERTIBLE DEBENTURES (continued)

maintain a common stock escrow account with 10,000,000 unrestricted,
free-trading shares of common stock. As part of the Company's merger with OS on
October 9, 2003, the Company assumed all the obligations and responsibilities of
the Agreement. In return for issuing the debentures to HEM, the Company received
$500,000 in December 2003 and the remaining $500,000 on January 9, 2004. On
September 9, 2005, Eurofortune Holding, S.A. ("Eurofortune"), an entity
affiliated with the Company's former chief executive officer purchased three
convertible debentures from HEM. Simultaneously, Eurofortune exchanged the three
debentures for two convertible debentures issued by the Company each having an
aggregate principal amount of $500,000. The outstanding principal amount and
accrued interest at the rate of 1% per annum of the debentures is due and
payable on October 9, 2008. The conversion prices of the debentures are fixed at
$1.25 and $1.56. Additionally, the 10 million unrestricted free-trading shares
of the Company's common stock held in escrow were returned to the treasury.

The convertible debentures initially issued to HEM contain an imbedded
beneficial conversion feature since the fair market value of the common stock
exceeds the most beneficial exercise price on the debenture issuance date. The
value was computed as $1,000,000, which will be amortized over the respective
term of the debentures. During the six-month period ended December 31, 2007 and
2006, the amortization of the debt discount amounted to approximately $25,000
and $54,000, respectively, and has been included in interest expense in the
accompanying consolidated financial statements. Accrued interest associated with
the convertible debentures amounted to approximately $41,000 at December 31,
2007.

In April 2004, the Company sold its Senior Convertible Debenture (the
"Debenture") in the face amount of $3,000,000 to Armadillo Investments, PLC. In
consideration for the Debenture, the Company received 1,595,745 ordinary shares
of Armadillo Investments. The Company immediately sold these shares for
approximately $1,420,000. The Debenture does not bear interest. In the event of
default, as defined under the Debenture. The Debenture accrues interest at the
rate of 10% per annum. The Debenture matures on March 25, 2009. The Debenture is
convertible into our common stock at a conversion price per share of (a) four
dollars ($4.00) (the "Fixed Conversion Price") or (b) eighty percent (80%) of
the lowest closing bid price for the Common Stock in the ten (10) business days
preceding the date of conversion, but in no event less than fifty percent (50%)
of the Fixed Conversion Price (the "Floating Conversion Price").

For purposes of determining the closing bid price on any day, reference shall be
the closing bid price for a share of Common Stock on such date on the OTC
Bulletin Board, as reported on Bloomberg, L.P. (or similar organization or
agency succeeding to its functions of reporting prices). The Company granted
piggyback registration rights with respect to the common stock into which the
Debenture is convertible. The Company is required to maintain in escrow 750,000
shares of common stock upon conversion of the Debenture.

The difference between the face amount of the Debenture and the proceeds
generated from the shares received in exchange of the Debentures amounted to
approximately $1,580,000 and has been recorded as a debt discount. Such debt
discount is amortized over the term of the


                                       20
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 8 - CONVERTIBLE DEBENTURES (continued)

Debenture. During the six-month period ended December 31, 2007 and 2006, the
amortization of the debt discount amounted to approximately $115,000 and
$237,000, respectively, and has been included in interest expense in the
accompanying financial statements.

NOTE 9 - LINES OF CREDIT

The Company entered into lines of credit agreements with two financial
institutions up to the aggregate amount of approximately $5.0 million. The
Company has used approximately $2.2 million under such lines of credit at
December 31, 2007. The lines of credit bear interest at the URIBOR rate plus
2.0% to 3.7% at December 31, 2007. The outstanding principal balance plus any
interest is payable on demand and is secured by accounts receivables of
approximately $8.1 million and inventories of approximately $4.9 million.

Effective March 31, 2004, concurrent with an amended distribution agreement, the
Company issued to a distributor a revolving promissory note for certain sums to
come due to Medicor based on Medicor's and the manufacturer's administration of
product replacement claims. The note bears interest at the rate of 6.75% per
annum. The principal amount under the note as of December 31, 2007 was $0. The
distribution is presently under bankruptcy proceedings. During August 2007, the
distribution claimed that the Company owes $4.8 million under the promissory
note. The Company disputes that it presently owes the distributor the $4.8
million claimed to be due under the amended distribution agreement and has
sought substantiation for such amount by requesting information from the
distributor. To date, the distributor has not provided the information
requested. The Company has notified the distributor that it is in default under
the amended distribution agreement and terminated the agreement in May 2007.

Based on the review of certain information supplied by an agent for the
distributor to the Company's consultant on U.S. Food & Drug Administration
matters, the Company believes that the distributor did not comply with its
obligations under the amended distribution agreement. As a result of the
distributor's breach of its obligations to the Company, the Company believes
that it has incurred significant damages in excess of the $4.8 million claimed
to be due to the distributor because of the distributor's breach of its
obligations under the amended distribution agreement. During November 2007, the
Company filed proof of a claim in excess of $28.7 million against Medicor. The
Company has provided for a provision for such claims aggregating $1.8 million at
December 31, 2007, as reflected in accounts payable and accrued expenses in the
accompanying balance sheet.

NOTE 10 - STOCK OPTIONS

In July 2004, the Board of Directors adopted the Heritage Worldwide, Inc. 2004
Stock Option Plan (the "2004 Plan"). The Company intends to attract and retain
employees and valuable contractors by allowing them an additional incentive to
promote the financial success of the Company.

The 2004 Plan allows for the grant of both incentive stock options and
nonstatutory stock options.


                                       21
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 10 - STOCK OPTIONS (continued)

The 2004 Plan may be administered, interpreted and constructed by the Board of
Directors or a compensation committee. The maximum number of shares of common
stock which may be issued pursuant to options granted under the 2004 Plan may
not exceed 2,000,000 shares. During July 2004, the Company issued 1,175,000
options. If any options granted under the 2004 Plan expires or terminates
without having been exercised or ceased to be exercisable, such options will be
available again under the 2004 Plan. All employees of the Company and its
subsidiaries are eligible to receive incentive stock options and nonstatutory
stock options. Non-employee directors and outside consultants who provided
bona-fide services not in connection with the offer or sale of securities in a
capital raising transaction are eligible to receive nonstatutory stock options.
Incentive stock options may not be granted below their fair market value at the
time of grant or, if to an individual who beneficially owns more than 10% of the
total combined voting power of all stock classes of the Company or a subsidiary,
the option price may not be less than 110% of the fair value of the common stock
at the time of grant. The expiration date of an incentive stock option may not
be longer than ten years from the date of grant. Option holders, or their
representatives, may exercise their vested options up to three months after
their employment termination or one year after their death or permanent and
total disability. The 2004 Plan provides for adjustments upon changes in
capitalization.

During the six-month periods ended December 31, 2007 and 2006, the Company
recorded share-based payment expenses amounting to approximately $46,000 and
$459,000, respectively, in connection with all options outstanding at the
respective measurement dates. The amortization of share-based payment were
recorded in cost of revenues.

As of December 31, 2007, the unrecognized compensation costs related to
non-vested awards amounted to approximately $57,000, which will be recognized
over the next 15 months.

NOTE 11 - SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in one single segment, breast implants and analyzes its
revenues as derived from two geographic locations: France and the rest of the
world. The Company did not have revenues from the U.S. during the six-month
periods ended December 31, 2007 and 2006. Information about the Company's sales
in different geographic locations for the six-month periods ended December 31,
2007 and 2006, respectively is shown below pursuant to the provisions of SFAS
No. 131, "Disclosures about segments of an Enterprise and Related Information."

                                         Six-month period ended
                                              December 31,
                                    ----------------------------------
                                         2007                 2006
                                    -------------       --------------
France                              $  1,142,585        $   2,068,669
Outside of France                      8,261,563            5,700,801
                                    -------------       --------------
                                    $  9,404,148        $   7,769,470
                                    =============       ==============

Substantially all of the identifiable operating assets and liabilities of the
Company are within France.


                                       22
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 12 - LEGAL CONTINGENCIES

In October 1999, June 2000 and July 2003, separate but related complaints were
filed by Saul Kwartin, Ruth Kwartin, Steven M. Kwartin, Robert Kwartin and Nina
Kwartin against our subsidiary Poly Implant Protheses, S.A. ("PIP"), III
Acquisition Corp. d/b/a PIP .America, PIP/USA, Inc., Jean-Claude Mas, our former
CEO, personally, and others, in the Circuit Court of Miami-Dade County, Florida.
Plaintiffs are all members of one family who purport to be shareholders of
PIP/USA, Inc., a distributor of PIP, suing derivatively on its behalf, and
individually, and seeking to rescind various transactions between PIP .America
and PIP, and seeking to impose liability against PIP and its co-defendants for
unspecified monetary damages arising out of alleged tortious and other purported
wrongful acts concerning alleged relationships between plaintiffs, PIP and the
other defendants.

Initially, two cases were filed: one in October of 1999 by Saul and Ruth Kwartin
and assigned Case No. 99-25227-CA-01 and one in June of 2000 by Steven Kwartin
and assigned Case No. 00-14665-CA-01. Case No. 99-25227 was voluntarily
dismissed by the Plaintiffs, who then unsuccessfully tried to withdraw their
dismissal. The Plaintiffs then appealed. In May of 2004, the appellate court
affirmed the trial court's Order approving the voluntary dismissal. A motion by
PIP/USA and Mr. Mas to recover their attorneys' fees is pending in the trial
court, as is a motion to disqualify the Plaintiffs' counsel in that lawsuit.
Case No. 00-14665-CA-01 by Steven Kwartin remains pending. In June of 2003,
Robert and Nina Kwartin commenced a lawsuit assigned Case No. 03-15006. That
lawsuit remains pending. In September of 2003, Saul and Ruth Kwartin filed
another lawsuit assigned Case No. 03-22537-CA-27, alleging similar claims to
those included in the dismissed case. Within a day or two of that lawsuit,
Steven Kwartin filed his second lawsuit assigned Case No. 03-22399-CA-15,
against Mr. Mas and Donald McGhan only. On December 22, 2005 four of the five
lawsuits were consolidated for pre-trial purposes. They are cases No.:
00-14665-CA-31, 03-15006-CA-31, 03-22399-CA-31 and 03-22537-CA-31, of those four
cases three were transferred to the Complex Business Litigation Section 40 by
Order dated December 29, 2006. The cases transferred were cases No.:
03-15006-CA-31, 03-22399-CA-31 and 0322537-CA-31.. A hearing on Defendants PIP
and Jean-Claude Mas' motion to disqualify Plaintiff's counsel was held on
September 11. The Court has not ruled yet.

In November of 2003, Jessica Fischer Schnebel and fifteen other women filed a
Second Amended Consolidated Class Action Complaint against PIP, PIP/USA, Inc.
and III Acquisition Corp. d/b/a PIP America in the Circuit Court of Cook County,
Illinois. The Second Amended Consolidated Class Action Complaint contains counts
alleging product liability, breach of the implied warranties of merchantability
and fitness for a particular purpose, violation of the Illinois Consumer Fraud
Act and a contract claim alleging third-party beneficiary status. Unspecified
monetary damages, exemplary damages and attorneys fees and costs are sought.
Motions to dismiss filed by PIP and PIP .America remains pending and discovery






                                       23
<PAGE>

                    HERITAGE WORLDWIDE, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2007

NOTE 12 - LEGAL CONTINGENCIES (continued)

is underway. The plaintiffs have not sought to date to certify any putative
class. Our U.S. distributor has tendered this case to PIP, for defense and
indemnity pursuant to the distributor agreement. On June 7, 2006, Poly Implant
Protheses, S.A. filed a motion to dismiss third amended consolidated class
action Complaint. That motion remains pending. A Status conference is set for
December 6, 2007 at 11:00a.m.

In May 2006, the Company was sued in the Nottingham County Court by 28
plaintiffs under the "The Consumer Protection Act" of the United Kingdom. The
plaintiffs alleged that the envelope surrounding their implants, obtained by
their respective surgeons from PIP France, SA, were not resistant enough and
could cause pain and inflammation when they leak. The plaintiffs allege they
should be reimbursed approximately $700,000 in costs and damages. The Company is
expecting to present expert reports to the Notthingham County Court judge in
February 2008.

In February of 2008, PIP was served with a Complaint filed in federal court in
Houston, Texas by seven women alleging product liability related claims. The
lead plaintiff is named Nancy Ewert. PIP has not yet responded to the Complaint.

Though it is not yet possible to predict the outcome of any of the cases
described above, the Company and its subsidiaries, as applicable, have denied
plaintiffs' allegations and are vigorously defending themselves upon the merits
of each lawsuit and against certification of any class in the Illinois Schnebel
lawsuit, which is the only remaining putative class action.

III Acquisition Corp. d/b/a PIP .America claims indemnification from PIP/USA,
Inc., Poly Implants Protheses, S.A., and Jean-Claude Mas, personally, from
allclaims, including those asserted above. The Company believes the costs
associated with these matters will not have a material adverse impact on the
Company's business, results of operations or financial position. The Company has
recorded a provision of approximately $520,000 at June 30, 2006 in connection
with these matters.


                                       24
<PAGE>

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

Heritage Worldwide, Inc. (the "Company" or "we") and its subsidiaries develop,
manufacture, and market breast implants worldwide. We ceased making sales in the
U.S. market in May 2000, as a result of changes in FDA regulations. At that
time, the U.S. market represented approximately $4 million, or 40% of our
revenues.

We are in the process of developing new products. We expect to introduce a new
product line of breast implants which is based on titanium coating. We are
completing the planning phase of our European clinical trials and anticipate
that we will market such breast implants in the European Union within 24 months,
although this date may be extended subject to the results of our clinical
trials. We believe that the costs of monitoring the clinical trials will be
approximately $500,000 over this period. We will continue to invest in research
and development to enhance and introduce new and existing products. To meet
these operational costs, we depend upon equity financings, collaborations, and
proceeds from short and long-term debt.

A summary of significant accounting policies is provided in Note 3 to our
consolidated financial statements included in this Form 10-KSB. Management
believes that the application of these policies on a consistent basis enables
the Company to provide useful and reliable financial information about the
Company's operating results and financial condition.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results will differ from those estimates.

Stock-Based Compensation. Prior to January 1, 2006, the Company accounted for
its stock-based compensation plans under the recognition and measurement
provisions of Accounting Principles Board ("APB") Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations, as permitted by SFAS No.
123, Accounting for Stock-Based Compensation. The Company did not recognize
compensation cost related to stock options granted to its employees and
non-employee directors that had an exercise price equal to or above the market
value of the underlying common stock on the date of grant in its condensed
consolidated statement of income prior to January 1, 2006. Effective January 1,
2006, the Company adopted the fair value recognition provisions of SFAS No.
123R, Share-Based Payment, and related interpretations using the
modified-prospective transition method. Under that method, compensation cost
recognized in the third quarter of 2006 includes (a) compensation cost for all
stock-based awards granted prior to, but not yet vested as of January 1, 2006
based on the grant date fair value estimated in accordance with the original
provisions of SFAS No. 123 and (b) compensation cost for all stock-based awards
granted on or subsequent to January 1, 2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS No. 123R. Results for prior
periods have not been restated. Prior to the adoption of SFAS No. 123R, the
Company did not recognize any tax benefits from deductions resulting from the
exercise of stock options as operating cash flows in its statement of cash
flows, because no options have ever been exercised. SFAS No. 123R requires that
the portion of benefits resulting from tax deductions in excess of recognized
compensation (the "excess tax benefits") be presented as financing cash flows.

In November 2005, the FASB issued FASB Staff Position FAS123(R)-3, Transition
Election to Accounting for the Tax Effects of Share-Based Payment Awards, (the
"FSP"). This FSP requires an entity to follow either the transition guidance for
the additional-paid-in-capital pool as prescribed in SFAS No. 123R or the
alternative transition method as described in the FSP. An entity that adopts
SFAS No. 123R using the modified prospective method may make a one-time election
to adopt the transition method described in this FSP. An entity may take up to
one year from the later of its initial adoption of SFAS No. 123R or the
effective date of this FSP to evaluate its available transition alternatives and
make its one-time election. This FSP became effective in November 2005. The
Company is still evaluating whether it will adopt the alternative method for
calculating its additional-paid-in-capital pool described in the FSP.

                                       25
<PAGE>

Revenues. We recognize product revenue, net of estimated sales discounts and
returns and allowances, in accordance with Staff Accounting Bulletin No. 104,
"Revenue Recognition in Financial Statements" and SFAS No. 48 "Revenue
Recognition When Right of Return Exists." These statements established that
revenue can be recognized when persuasive evidence of an arrangement exists, the
product has been shipped, all significant contractual obligations have been
satisfied, the fee is fixed or determinable and collection is reasonably
assured.

As of December 31, 2007, we did not have any outstanding bill and hold
arrangements. From time to time, we entered into such bill and hold arrangements
if they meet the following criteria for revenue recognition:

          o    The risks of ownership passed to the buyer;
          o    The customer made a fixed commitment to purchase the breast
               implants, in writing;
          o    The buyer, not us, requested that the transaction be on a bill
               and hold basis. The buyer had a substantial business purpose for
               ordering the goods on a bill and hold basis-primarily its on lack
               of warehousing space;
          o    There is a fixed schedule for delivery of the goods. The date for
               delivery are reasonable and are consistent with the buyer's
               business purpose;
          o    We did not retain any specific performance obligations such that
               the earning process is not complete;
          o    The ordered breast implants were segregated from our inventory
               and were not subject to being used to fill other orders;
          o    The breast implants were complete and ready for shipment;
          o    The date by which we expect payment was not modified and we have
               not modified our normal billing and credit terms for this buyer;
          o    Our past experiences with and pattern of bill and hold
               transactions;
          o    The buyer has the expected risk of loss in the event of a decline
               in the market value of the breast implants;
          o    Our custodial risks are insurable and insured; and
          o    The business reasons for the bill and hold have not introduced a
               contingency to the buyer's commitment.

Accounts receivables and related allowance for doubtful accounts. Accounts
receivable are reported at net realizable value. We have established an
allowance for doubtful accounts based upon factors pertaining to the credit risk
of specific customers, historical trends, and other information. Delinquent
accounts are written-off when it is determined that the amounts are
uncollectible.

Inventories. Inventories are stated at the lower of cost or market, cost
determined by the first-in, first-out (FIFO) method. The Company writes down its
inventory for estimated obsolescence or unmarketable inventory equal to the
difference between the cost of inventory and the estimated market value based
upon assumptions about future demand and market conditions

Goodwill. At December
31, 2007, we had approximately $1.2 million in indefinite lived goodwill related
to our acquisition of our subsidiary in Spain. We evaluate goodwill based on the
future contributing margins of such subsidiary. We use judgment in assessing
goodwill for impairment. Goodwill is reviewed for impairment annually, or sooner
if events or changes in circumstances indicate that the carrying amount could
exceed fair value. Fair values are based on discounted cash flows using a
discount rate determined by our management to be consistent with industry
discount rates and the risks inherent in our current business model. In
accordance with SFAS No. 142, we completed the required impairment tests of
goodwill at the date of adoption and annually as required. There were no
impairment charges recorded as a result of the adoption of SFAS No. 142 or
annual impairment tests. Due to uncertain market conditions and potential
changes in our strategy and product portfolio, it is possible that the forecasts
we use to support our goodwill could change in the future, which could result in
non-cash charges that would adversely affect our results of operations and
financial condition.



                                       26
<PAGE>

Deferred Tax Assets. We are required to estimate our income
taxes in each of the jurisdictions in which we operate as part of the process of
preparing our consolidated financial statements. At December 31, 2007, the
Company has no net deferred tax assets. SFAS No. 109, Accounting for Income
Taxes, requires a valuation allowance to reduce the deferred tax assets reported
if, based on the weight of the evidence, it is not more likely than not that
some portion or all of the deferred tax assets will be realized. Management
reviews deferred tax assets periodically for recoverability and makes estimates
and judgments regarding the expected geographic sources of taxable income, gains
from investments, as well as tax planning strategies in assessing the need for a
valuation allowance. We determined that a valuation allowance of approximately
$1,640,000 relating to foreign tax net operating loss carryovers was necessary
to reduce our deferred tax assets to the amount that will more likely than not
be realized. If the estimates and assumptions used in our determination change
in the future, we could be required to revise our estimates of the valuation
allowances against our deferred tax assets and adjust our provisions for
additional income taxes. In the ordinary course of global business, there are
transactions for which the ultimate tax outcome is uncertain, thus judgment is
required in determining the worldwide provision for income taxes. We provide for
income taxes on transactions based on our estimate of the probable liability. We
adjust our provision as appropriate for changes that impact our underlying
judgments. Changes that impact provision estimates include such items as
jurisdictional interpretations on tax filing positions based on the results of
tax audits and general tax authority rulings. Due to the evolving nature of tax
rules combined with the large number of jurisdictions in which we operate, it is
possible that our estimates of our tax liability and the realization of our
deferred tax assets could change in the future, which may result in additional
tax liabilities and adversely affect our results of operations, financial
condition and cash flows.

Product replacements. We provide a product replacement program on our products.
Management estimated the amount of potential future product replacement claims
based on statistical analysis. Expected future obligations are determined based
on the history of product shipments and claims and are discounted to a current
value. Changes to actual claims and interest rates could have a material impact
on the statistical calculation which could materially impact the Company's
reported expenses and results of operations.


                                       27
<PAGE>

RESULTS OF OPERATIONS

               CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>


                                                  For the six-month period ended           Increase/       Increase/
                                                            December 31,                  (Decrease)      (Decrease)
                                              ----------------------------------------     2007 vs 2006    2007 vs 2006
                                                     2007                 2006                  $              %
                                              -------------------   ----------------------------------------------------
                                                 (Unaudited)            (Unaudited)

<S>                                           <C>                   <C>                  <C>                      <C>
Revenues                                      $        9,404,148    $       7,769,470    $     1,634,678          21.0%

Cost of revenues                                       4,141,704            3,509,652            632,052          18.0%
                                              -------------------   ----------------------------------------------------

     Gross margin                                      5,262,444            4,259,818          1,002,626          23.5%
                                              -------------------   ----------------------------------------------------

Operating expenses:
  Selling, general and administrative                  4,976,135            3,888,391          1,087,744          28.0%
  Research and development                               670,616              719,903            (49,287)         -6.8%
                                              -------------------   ----------------------------------------------------

     Total operating expenses                          5,646,751            4,608,294          1,038,457          22.5%
                                              -------------------   ----------------------------------------------------

Loss before other expenses and
Operating (loss) income                                 (384,307)            (348,476)           (35,831)         10.3%
                                              -------------------   ----------------------------------------------------

Other expenses:
 Gain in equity investment                                 9,464                8,145              1,319          16.2%
  Interest expense-related party                         (49,858)             (86,268)            36,410         -42.2%
  Interest expense                                      (261,153)            (333,963)            72,810         -21.8%
                                              -------------------   ----------------------------------------------------

     Total other expenses                               (301,547)            (412,086)           110,539         -26.8%
                                              -------------------   ----------------------------------------------------

(Loss) income before provision for income taxes         (685,854)            (760,562)            74,708          -9.8%

  Provision for income taxes                                   -                    -                  -       NM
                                              -------------------   ----------------------------------------------------

(Loss) income before minority interest                  (685,854)            (760,562)            74,708          -9.8%

Minority interest                                           (849)              13,362            (14,211)       -106.4%
                                              -------------------   ----------------------------------------------------

Net (loss) income                             $         (686,703)   $        (747,200)   $        60,497          -8.1%
                                              ===================   ====================================================

</TABLE>

NM: not meaningful



Six months Ended December 31, 2007 Compared with Six months Ended December 31,
2006

   Revenues

Revenues consist primarily of the sale of breast implants and other body support
products. The increase in revenues during the six-month period ended December
31, 2007 when compared to the prior year period is primarily attributable to
increased volume of breast implants sold to distributors in Latin America, and
offset by a decrease in volume of breast implants sold to existing surgeons and
clinics in France.

   Cost of Revenues

Cost of revenues consists primarily of materials and direct labor expenses
associated with the production of breast implants. The increase in costs of
revenues during the six-month period ended December 31, 2007 is primarily
attributable to an increase in volume of product sold.

                                       28
<PAGE>

   Selling and General Administrative Expenses

Selling, general and administrative expenses consist primarily of compensation
and related benefits of sales representatives which market our products, general
and administrative staff used to support our operations, as well as
facilities-related expenses, professional fees and provision for bad debts. The
increase in selling, general and administrative expenses during the six-month
period ended December 31, 2007 when compared to the prior year comparable period
is primarily attributable to the following factors:

          o    Increased professional and legal fees related to certain
               corporate activities as well as legal fees incurred in connection
               with legal proceedings in the United Kingdom during the six-month
               period ended December 31, 2007. Such corporate activities and
               legal proceedings did not occur during the six-month period ended
               December 31, 2006.
          o    Increased sales and marketing expenses associated with the
               development of new distribution channels outside of France.
          o    Higher local currency rate. A substantial portion of our sales,
               general, and administrative expenses are incurred in Euros, which
               appreciated by approximately 10% during the six-month period
               ended December 31, 2007 when compared to the six-month period
               ended December 31, 2006.

   Research and Development

Research and development expenses primarily consist of compensation and related
benefits of personnel associated with the development and introduction of
existing and future product lines. The decrease in research and development
expenses during the six-month period ended December 31, 2007 is primarily due to
a reduction of personnel used in connection with the development of new products
and the enhancement of existing products.

   Interest Expense

Interest expense consists primarily of amortization of debt discount associated
with the issuance of convertible debentures and interest expense associated with
our lines of credit and other long-term debt. The decrease in interest expense
during the six-month period ended December 31, 2007 when compared to the prior
sales period is primarily due to the use of the sum of the year digit in
computing the amortization.

   Liquidity and Capital Resources

At December 31, 2007, our cash amounted to approximately $86,000 and our working
capital amounted to approximately $3.9 million.

         During the six-month period ended December 31, 2007, we generated cash
from our operating activities amounting to approximately $241,000. Our cash used
in operating activities was comprised of our net loss of approximately $687,000
adjusted for the following:

          o    Debt discount of approximately $225,000;
          o    Depreciation and amortization of approximately $624,000;
          o    Fair value of options of approximately $46,000;
          o    Provision for doubtful accounts of approximately $23,000; and
          o    Provision for returns of approximately $130,000;

Additionally, the following variations in operating assets and liabilities
impacted our cash used in operating activity:

          o    Decrease in accounts receivable of approximately $462,000 due to
               larger collection efforts implemented in the second quarter of
               fiscal 2008; and
          o    Decrease in accounts payable and accrued expenses of
               approximately $127,000;

         During the six-month period ended December 31, 2007, we purchased
property and equipment of approximately $292,000.


                                       29
<PAGE>

         During the six-month period ended December 31, 2006, we used cash in
operating activities amounting to approximately $657,000. Our cash used in
operating activities was comprised of our net loss of approximately $747,000
adjusted for the following:

          o    Debt discount of approximately $255,000;
          o    Depreciation and amortization of approximately $299,000;
          o    Fair value of options of approximately $159,000; and
          o    Provision for returns of approximately $90,000;

Additionally, the following variations in operating assets and liabilities
impacted our cash used in operating activities:

          o    Decrease in accounts receivable of approximately $261,000 due to
               higher rate of collection during the six-month period ended
               December 31, 2006;
          o    Increase in inventories of approximately $107,000 due to
               increased production to meet anticipated demand;
          o    Decrease in current assets of approximately $165,000;
          o    Decrease in accounts payable and accrued expenses of
               approximately $821,000;

         During the six-month period ended December 31, 2006, we purchased
property and equipment of approximately $175,000.

         During the six-month period ended December 31, 2007, we generated cash
from financing activities of approximately $29,000, which primarily consisted of
the proceeds from issuance of long-term debt amounting to approximately
$542,000, offset by the decrease in lines of credit, the repayment of long-term
debt, and capitalized lease obligations of approximately $259,000, $161,000 and
$151,000.

         During the six-month period ended December 31, 2006, we used cash in
financing activities of $289,000, which primarily consisted of proceeds from
issuance of long-term debt and lines of credit of approximately $35,000 and
$606,000, offset by the repayment of long-term debt and capitalized lease
obligations of approximately $267,000 and $85,000.

New Accounting Pronouncements

In December 2007, the FASB issued FASB Statement No. 160 - Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB No. 51.
This Statement applies to all entities that prepare consolidated financial
statements, except not-for-profit organizations, but will affect only those
entities that have an outstanding noncontrolling interest in one or more
subsidiaries or that deconsolidate a subsidiary. Not-for-profit organizations
should continue to apply the guidance in Accounting Research Bulletin No. 51,
Consolidated Financial Statements, before the amendments made by this Statement,
and any other applicable standards, until the Board issues interpretative
guidance.

This Statement amends ARB 51 to establish accounting and reporting standards for
the noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this Statement was issued,
limited guidance existed for reporting noncontrolling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This Statement improves
comparability by eliminating that diversity.

                                       30
<PAGE>

A noncontrolling interest, sometimes called a minority interest, is the portion
of equity in a subsidiary not attributable, directly or indirectly, to a parent.
The objective of this Statement is to improve the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require: (a) The ownership interests in subsidiaries held by
parties other than the parent be clearly identified, labeled, and presented in
the consolidated statement of financial position within equity, but separate
from the parent's equity, (b) The amount of consolidated net income attributable
to the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, (c) Changes in a
parent's ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently. A parent's ownership
interest in a subsidiary changes if the parent purchases additional ownership
interests in its subsidiary or if the parent sells some of its ownership
interests in its subsidiary. It also changes if the subsidiary reacquires some
of its ownership interests or the subsidiary issues additional ownership
interests. All of those transactions are economically similar, and this
Statement requires that they be accounted for similarly, as equity transactions,
(d) When a subsidiary is deconsolidated, any retained noncontrolling equity
investment in the former subsidiary be initially measured at fair value. The
gain or loss on the deconsolidation of the subsidiary is measured using the fair
value of any noncontrolling equity investment rather than the carrying amount of
that retained investment, (e) Entities provide sufficient disclosures that
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners.

This Statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009,
for entities with calendar year-ends). Earlier adoption is prohibited. This
Statement shall be applied prospectively as of the beginning of the fiscal year
in which this Statement is initially applied, except for the presentation and
disclosure requirements. The presentation and disclosure requirements shall be
applied retrospectively for all periods presented. Management believes this
Statement will have no impact on the financial statements of the Company once
adopted.

In December 2007, the FASB issued FASB Statement No. 141 (revised 2007),
Business Combinations. This Statement replaces FASB Statement No. 141, Business
Combinations. This Statement retains the fundamental requirements in Statement
141 that the acquisition method of accounting (which Statement 141 called the
purchase method) be used for all business combinations and for an acquirer to be
identified for each business combination. This Statement defines the acquirer as
the entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. This Statement's scope is broader than that of Statement 141,
which applied only to business combinations in which control was obtained by
transferring consideration. By applying the same method of accounting--the
acquisition method--to all transactions and other events in which one entity
obtains control over one or more other businesses, this Statement improves the
comparability of the information about business combinations provided in
financial reports.

This Statement requires an acquirer to recognize the assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited
exceptions specified in the Statement. That replaces Statement 141's
cost-allocation process, which required the cost of an acquisition to be
allocated to the individual assets acquired and liabilities assumed based on
their estimated fair values.

This Statement applies to all transactions or other events in which an entity
(the acquirer) obtains control of one or more businesses (the acquirer),
including those sometimes referred to as "true mergers" or "mergers of equals"
and combinations achieved without the transfer of consideration, for example, by
contract alone or through the lapse of minority veto rights. This Statement
applies to all business entities, including mutual entities that previously used
the pooling-of-interests method of accounting for some business combinations. It
does not apply to: (a) The formation of a joint venture, (b) The acquisition of
an asset or a group of assets that does not constitute a business, (c) A
combination between entities or businesses under common control, (d) A
combination between not-for-profit organizations or the acquisition of a
for-profit business by a not-for-profit organization.


                                       31
<PAGE>

This Statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. An entity may not apply it
before that date. Management believes this Statement will have no impact on the
financial statements of the Company once adopted.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering
the Effects of Prior Year Misstatements when quantifying Misstatements in
Current Year Financial Statements ("SAB 108"). SAB 108 requires companies to
evaluate the materiality of identified unadjusted errors on each financial
statement and related financial statement disclosure using both the rollover
approach and the iron curtain approach, as those terms are defined in SAB 108.
The rollover approach quantifies misstatements based on the amount of the error
in the current year financial statement, whereas the iron curtain approach
quantifies misstatements based on the effects of correcting the misstatement
existing in the balance sheet at the end of the current year, irrespective of
the misstatement's year(s) of origin. Financial statements would require
adjustment when either approach results in quantifying a misstatement that is
material. Correcting prior year financial statements for immaterial errors would
not require previously filed reports to be amended. If a Company determines that
an adjustment to prior year financial statements is required upon adoption of
SAB 108 and does not elect to restate its previous financial statements, then it
must recognize the cumulative effect of applying SAB 108 in fiscal 2006
beginning balances of the affected assets and liabilities with a corresponding
adjustment to the fiscal 2006 opening balance in retained earnings. SAB 108 is
effective for interim periods of the first fiscal year ending after November 15,
2006. The adoption of SAB 108 did not have an impact on the Company's
consolidated financial statements.

In September 2006, the FASB issued FASB Statement No. 157. This Statement
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is a
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the application of this
Statement will change current practices. This Statement is effective for
financial statements for fiscal years beginning after November 15, 2007. Earlier
application is permitted provided that the reporting entity has not yet issued
financial statements for that fiscal year. Management believes that, for the
foreseeable future, this Statement will have no impact on the financial
statements of the Company once adopted.

On July 13, 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, ("FIN 48"), entitled, "Accounting for Uncertainty in
Income Taxes - an Interpretation of FASB Statement No. 109". Concurrently, FASB
issued a FASB staff position (FSP) relating to income taxes, (FSP) No. FAS 13-2,
"Accounting for a Change or Projected Change in the Timing of Cash Flows
Relating to Income Taxes Generated by a Leveraged Lease Transaction." FASB's
summary of FIN 48 notes that differences between tax positions recognized in the
financial statements and tax positions taken in the tax return (referred to
commonly as "book" vs. "tax") will generally result in: (a) an increase in a
liability for income taxes payable or a reduction of an income tax refund
receivable, (b) a reduction in a deferred tax asset or an increase in a deferred
tax liability, or (c) both of the above. FIN 48 requires the affirmative
evaluation that it is more likely than not, based on the technical merits of a
tax position, that an enterprise is entitled to economic benefits resulting from
positions taken in income tax returns. Further, if a tax position does not meet
the more-likely-than-not recognition threshold, the benefit of that position is
not recognized in the financial statements. Additionally, FIN 48 establishes
guidance for "derecognition" of previously recognized deferred tax items, and
sets forth disclosure requirements. The effective date of FIN 48 is for fiscal
years beginning after December 15, 2006. We do not believe that, for the
foreseeable future, FIN 48, once adopted, will have a significant impact on our
financial position, operating results, or cash flows.

In February 2007, the FASB issued FASB Statement No. 159 "The Fair Value Option
for Financial Assets and Financial Liabilities--Including an amendment of FASB
Statement No. 115". This Statement permits entities to choose to measure many
financial instruments and certain other items at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This Statement is expected to expand the use of fair value
measurement, which is consistent with the FASB's long-term measurement
objectives for accounting for financial instruments. This Statement applies to
all entities, including not-for-profit organizations. Most of the provisions of
this Statement apply only to entities that elect the fair value option.

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However, the amendment to FASB Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," applies to all entities with
available-for-sale and trading securities. Some requirements apply differently
to entities that do not report net income. The following are eligible items for
the measurement option established by this Statement:

     1.   Recognized financial assets and financial liabilities except:

          a)   An investment in a subsidiary that the entity is required to
               consolidate;
          b)   An interest in a variable interest entity that the entity is
               required to consolidate;
          c)   Employers' and plans' obligations (or assets representing net
               overfunded positions) for pension benefits, other postretirement
               benefits (including health care and life insurance benefits),
               postemployment benefits, employee stock option and stock purchase
               plans, and other forms of deferred compensation arrangements, as
               defined in FASB Statements No. 35, "Accounting and Reporting by
               Defined Benefit Pension Plans", No. 87, "Employers' Accounting
               for Pensions", No. 106, "Employers' Accounting for Postretirement
               Benefits Other Than Pensions", No. 112, "Employers' Accounting
               for Postemployment Benefits", No. 123 (revised December 2004),
               "Share-Based Payment", No. 43, "Accounting for Compensated
               Absences", No. 146, "Accounting for Costs Associated with Exit or
               Disposal Activities", and No. 158, "Employers' Accounting for
               Defined Benefit Pension and Other Postretirement Plans", and APB
               Opinion No. 12, "Omnibus Opinion--1967";
          d)   Financial assets and financial liabilities recognized under
               leases as defined in FASB Statement No. 13, "Accounting for
               Leases" (This exception does not apply to a guarantee of a
               third-party lease obligation or a contingent obligation arising
               from a cancelled lease.);
          e)   Deposit liabilities, withdrawable on demand, of banks, savings
               and loan associations, credit unions, and other similar
               depository institutions;
          f)   Financial instruments that are, in whole or in part, classified
               by the issuer as a component of shareholder's equity (including
               "temporary equity"). An example is a convertible debt security
               with a noncontingent beneficial conversion feature.

     2.   Firm commitments that would otherwise not be recognized at inception
          and that involve only financial instruments;

     3.   Nonfinancial insurance contracts and warranties that the insurer can
          settle by paying a third party to provide those goods or services; and

     4.   Host financial instruments resulting from separation of an embedded
          nonfinancial derivative instrument from a nonfinancial hybrid
          instrument.

The fair value option established by this Statement permits all entities to
choose to measure eligible items at fair value at specified election dates. A
business entity shall report unrealized gains and losses on items for which the
fair value option has been elected in earnings (or another performance indicator
if the business entity does not report earnings) at each subsequent reporting
date. A not-for-profit organization shall report unrealized gains and losses in
its statement of activities or similar statement.

The fair value option:

     o    May be applied instrument by instrument, with a few exceptions, such
          as investments otherwise accounted for by the equity method
     o    Is irrevocable (unless a new election date occurs)
     o    Is applied only to entire instruments and not to portions of
          instruments.

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This Statement is effective as of the beginning of an entity's first fiscal year
that begins after November 15, 2007. Early adoption is permitted as of the
beginning of a fiscal year that begins on or before November 15, 2007, provided
the entity also elects to apply the provisions of FASB Statement No. 157, "Fair
Value Measurements". No entity is permitted to apply this Statement
retrospectively to fiscal years preceding the effective date unless the entity
chooses early adoption. The choice to adopt early should be made after issuance
of this Statement but within 120 days of the beginning of the fiscal year of
adoption, provided the entity has not yet issued financial statements, including
required notes to those financial statements, for any interim period of the
fiscal year of adoption. This Statement permits application to eligible items
existing at the effective date (or early adoption date).

Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the consolidated financial
statements upon adoption.

ITEM 3.     CONTROLS AND PROCEDURES

            Our principal executive officer and our principal financial officer
evaluated the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended) as of the end of the period covered by this report
("Evaluation Date"). Based on this evaluation, our principal executive officer
and our principal financial officer have concluded that, as of the Evaluation
Date, our controls and procedures are effective in providing reasonable
assurance that the information required to be disclosed in this report has been
recorded, processed, summarized and reported as of the period covered by this
report.

            There was no change in our internal control over financial reporting
(as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of
1934, as amended) identified in connection with the evaluation of our internal
controls that occurred during our last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, such controls.


                           PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

In May 2006, the Company was sued in the Nottingham County Court by 28
plaintiffs under the "The Consumer Protection Act" of the United Kingdom. The
plaintiffs alleged that the envelope surrounding their implants, obtained by
their respective surgeons from PIP France, SA, were not resistant enough and
could cause pain and inflammation when they leak. The plaintiffs allege they
should be reimbursed approximately $700,000 in costs and damages. The Company
intends to vigorously defend against this action.

In February of 2008, PIP was served with a Complaint filed in federal court in
Houston, Texas by seven women alleging product liability related claims. The
lead plaintiff is named Nancy Ewert. PIP has not yet responded to the Complaint.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3.   DEFAULTS IN SENIOR SECURITIES

None

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

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ITEM 5.   OTHER INFORMATION

None

ITEM 6.   EXHIBITS

              (a)  Exhibits

        Exhibit No.    Description

        31.1           Certification of Chief Executive Officer pursuant to
                       Section 302 of the Sarbanes-Oxley Act of 2002.
                       Filed herewith.
        31.2           Certification of Chief Financial Officer pursuant to
                       Section 302 of the Sarbanes-Oxley Act of 2002.
                       Filed herewith.
        32.1           Certification of Chief Executive Officer pursuant to 18
                       U.S.C Section 1350. Filed Herewith
        32.2           Certification of Chief Financial Officer pursuant to 18
                       U.S.C Section 1350. Filed Herewith.































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                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                   HERITAGE WORLDWIDE, INC.
                                                       (Registrant)

Date:  February 13, 2007                           By: /s/   Jean Claude Mas
                                                       -------------------------
                                                       Jean Claude Mas
                                                   Chairman of the Board and
                                                   Chief Executive Officer


                                                   By: /s/ Claude Couty
                                                       -------------------------
                                                       Claude Couty
                                                   Chief Financial Officer and
                                                   General Manager